Right Action Right Time

Thursday, September 25, 2008

The Architecture of Education, Part 2

The first part on the Architecture of Education is here.

The conference I attended, 3 days in the woods in British Columbia, changed who I am. I was there as a result of one man, who bootstrapped what I think is the most forward thing happening in education right now. This is why I traveled all that way to meet him, and join his organization to help them bootstrap their global program, taking students outside of BC for the first time.

One dad, who so was so moved by his daughters learning process, and request to learn at home from her parents, he decided to create a unique program, to accommodate her. He held a meeting to share his vision with others who might want to participate in their journey. No one came. Many would have stopped there, but he held another meeting. One dad showed up, and between these two fathers, willing to be something different for their children, the educational movement which is SelfDesign, was born.

I plied Brent's partner for information, as I am always interested in the story behind the story. What was it that made him so passionate, that he was willing to follow his vision through 25 years of ups and downs, creating what I think is going to be one of the most important events in education thus far, a self empowered group of students, in control of their own educational process, in global communication with one another? Of course she could not give me a simple answer, because evolution is not a simple process.

In my own study of Greek mythology, I have always been fascinated that the Greeks took their children to Chiron, the Centaur, who taught these children of the gods in such a way, they would surpass their parents in greatness. This was an expected outcome, when the gods left their treasured children, in his charge. What she told me, mirrored this principle, that Brent wanted something greater for his daughter, than he himself had.

At the conference, I made a new friend, a former professor in the College of Education at Seattle University, and a Harvard PHD. When I asked him why he traveled north to the woods, to be there, he said that he thinks this is one of the most important things happening in education, which is going to impact humanity's ability to evolve.

Evolve. Yes, that is my dream. If there are enough adults, holding the space for these magical children on the earth at this time, modeling that failure should be celebrated, thinking outside of the box is most welcome, learning what your own internal guidance system sounds like and having the courage to follow it is personal transformation at its best, I believe we have the potential to experience the largest evolutionary leap in humanity our wonderful planet has ever seen.

In thirty years, I hope to be driving with my grandchildren, and see what looks like Mr. Plumbean's street, in my number one favorite book of all time (which is saying a lot as books are one of my most favorite things, and my husband is a children's book author, but he will forgive me, I'm sure) the Big Orange Splot**. If you have not read it, please, please do.

I want to live in a world, where I can see the architecture of the dreams of today's children, made manifest, all around me. And thank you Brent, for bootstrapping a business, that I so believe in, giving me the professional opportunity to help create my vision of a world where children are supported in being the fullest version of themselves. In helping you bootstrap this global program, I have realized that SelfDesigning is me and I am it, it is a way of being where I can be nurtured and supported, in fulfilling all of my dreams, and hold the space for my husband, and children, to do the same.

After Mr. Plumbean, is inspired to create the house of his dreams, replete with frangipani and a crocodile, his neighbors cry in exasperation, "Tell him that we all liked it here before he changed his house. Tell him that his house has to be the same as ours so we can have a neat street."

"My house is me and I am it. My house is where I like to be and it looks like all my
dreams," was Mr. Plumbean's reply. Read the book and find out how one man,
modeling this, changed the architecture of his neighborhood, one person, one house,
one dream at a time.

*One of MJ Neal's projects, is featured in this month's issue of Dwell. He focuses on modern design, and
believes that great architecture, can be affordable.
**The Big Orange Splot by Daniel Manus Pinkwater, published by Hastings House by arrangement with
Scholastic Book Services


Ariel Miller, M.Div. leads the Bootstrap Education Subgroup. She is currently bootstrapping a home learning program with SelfDesign Global, an organization that has won several awards, and has a 25 year track record, developing new ways of supporting parents, and children in becoming joyful, enthusiastic, lifelong learners.

Saturday, September 20, 2008

Extreme Bootstrapping - Part 1

I'm a naive idealist, how 'bout you?

In late 2005, my motivations were many to quit a six figure, 25-year, high tech career and launch TRACEe, a venture dedicated to applying technology to tracing lives for good; the good of the individual, society and essentially for eternity. Among the most significant of these motives were to release pent up entrepreneurial energy, to engage in work that kept me closer to home in hopes of shoring up family relationships that had begun to unravel and to produce results with more meaning and direct benefit to society. Little did I know these motivations would draw me into the "underbelly of Austin" narrowly escaping bullets, knives and a family catastrophe.

In early 2006, I thought I was bootstrapping when I joined Bootstrap Austin. But, attending Bootstrap Austin networking meetings does not a bootstrapper make. Submitting a proposal for a Homeland Security SBIR grant doesn't either.

Which makes me wonder...what constitutes real bootstrapping? Does applying for 20 patent claims make you a bootstrapper? How about stumbling on a technology partner willing to lend software for demonstrating your proof of concept - ala "demo/sell/build?" Or leveraging UTA and St. Edwards University internship program resources to validate the business model and design elements of the offering? Or becoming a distribution partner for companies whose products are components within your intended offering? Or freelance consulting in areas aligned with your company direction? Or formulating an advisory board by promising a future equity stake? Or selling the company soul to the Austin Technology Incubator and affiliated VCs hoping to secure "free office space and business mentoring services?" Or volunteering your time to community events hoping to make the right contacts? It turns out that all of these fall short of what I discovered to be real bootstrapping.

Don't get me wrong, many of the aforementioned activities should and are commonly part of a bootstrapper's journey, however, real bootstrapping for me emerged only when faced with an imminent catastrophe in my life: the breakup of my family; my wife of 20 years, 16 year-old daughter and 11 year-old son.

It cut deep to learn that appreciation for the prior 20 years of providing a steady, high standard of living for my family was short-lived as evidenced by my wife's June 2007 ultimatum to "get a real job by year end or divorce will follow." Frankly, this was not unexpected as my wife and our financial situation had been under considerable strain since TRACEe began. What broadsided me, however, was when she relayed my daughter's perspective: "Mom, when are you going to divorce Dad?" POW - a heart punch! You never expect your own child to want you out of their life especially when you've spent the last 16 years loving and nurturing her to young adulthood.

So, what was I to do? Give up on TRACEe and go back to the corporate world fraught with meaningless churn, greed and travel so that my family could return to having all the comforts they had grown accustomed to but at the inevitable expense of a broken family anyway? Or, continue the TRACEe venture that felt like the right path to be on relative to my life, my family and society?

After a few days of contemplation, prayer, counsel with friends & fellow bootstrappers and a coincidental read of The Dip by Seth Godin, the answer was clear: push on, go where most are unwilling to go; survive the dip! After all, how could my friends, family and a person with the moral stature of my wife fault me for doing otherwise? So, push on it was...but how? What could possibly position TRACEe as a viable growth (or at least sustenance) business within a six month window and hold my family together?

That's when the creative entrepreneurial mind coupled with personal spiritual influences kicked in. Without actually realizing it, my subconscious mind, heart and soul were formulating a survival plan. One which surfaced at a most unexpected time - while applying a fresh coat of white paint to our back door on a hot, sunny August day. On that day, at that moment, as that brush stroke spread its film of latex down, with bitter sweet emotion, I surrendered to the core concept of my survival plan - to become homeless via a six month immersion on the streets of Austin, my only companions being the poorest of the poor, my laptop and my cell phone both equipped with mobile, live streaming video, GPS and chat capability. The goals were (1) to explore social networking for the homeless via live interactive streaming of their stories to a global internet audience, (2) drive TRACEe technology development, assets and business partnerships, (3) garner TRACEe recognition and marketing lift, (4) generate modest cash flow and last but not least (5) keep the family in tact. Why not since I was likely to be homeless come December anyway? To quote a friend, "That idea is so crazy, it just might work!"

Somehow this plan incorporated elements of my entire life as if it weren't actually a plan but a destined road map. It leveraged many significant personal, family, educational, work and spiritual experiences whose purpose was now being revealed in tHis "Master Plan," one that had a clear lead up and a promising aftermath for family, company and society assuming I survived!

So, let the real bootstrapping begin!

Please stay tuned for future posts covering how it all played out. Alternatively, please feel free to explore and decipher aspects of it sooner by visiting archived immersion video at my latest alpha site, Homeless Coach. Note: the homeless immersion activity is concentrated within the date range of 3/16/08 to 4/25/08 which can be accessed by clicking the "archive" button that launches a date-based search dialog.

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Thursday, September 18, 2008

The Architecture of Education, Part 1

Maxim V "To Teach, as the former of character, and the promoter of the collective happiness of man"
- A. Bronson Alcott, General Maxims by which to regulate the
Instructor's Practice, In Instruction, from the original Journal of 1826

Recently, I was traveling by bus from Seattle to British Columbia, for a business conference on education. I was so awed by seeing the beauty of the northwest for the first time, I would say I was having a downright mystical experience, until my heart sank, when we pulled into a strip mall to pick up some passengers.

It is not that I am so against strip malls, but this strip mall looked exactly like several I
frequently drive by in Austin. I saw a similar strip mall, when I traveled to where I grew
up in New England last year, and visited Indianapolis and Kentucky the year before.
Same strip mall, same architecture, same stores.

Education and how we regard our youth, is what I think about most of my waking moments (and in my sleep, as I dream about it too). I will admit, I am a bit of a zealot when it comes to educational issues.

My mind immediately translated this lack of uniqueness, what I was seeing several thousand miles from home, that looked exactly like what is down the street from me in the Lone Star State where I reside, as a reflection of our current education crisis.

Recently, I had several hours to sit and have a cup of tea with a mom who is married to a world class architect*, while our sons were shooting a movie, in which they had been cast. She is as passionate about architecture as I am education, and started cussing up a storm when she noticed the fake plastic moldings on the windows. She said, this was an attempt to make the building we were sitting in look like something it was not (a quaint European cottage). Her point of view was, why mimic something, with fake plastic, rather than just be uniquely what you are.

At first I thought she was acting a bit nuts, getting so upset over plastic window molding. When the bus pulled into that strip mall however, I realized she is right, and as passionate about authenticity in architecture, as I am about each child being supported in following their individual dreams, and passions, in education.

Upon having this realization, I remembered that in my own high school, there was a room in the center of the building, in which I refused to take classes. My mother was the guidance counselor, so I had access to the class list, and in which rooms classes would be held.

When she asked me why I so adamantly refused to take certain classes, I told her it was because they were being held in the dreaded room-with-no-windows. Pressing me further, as to why this was such a big deal, my answer was, "What if it starts to snow?"

In New England, once it turned cold and gray, I would hold my breath for the first snow fall of the year. I considered it an absolute crime to be stuck in a building where I was not allowed to go outside and dance in those first falling flakes, I certainly wasn't going to allow myself to miss the experience visually, if it happened during the school day.

While living in a small Texas town several years ago, my husband and I rode our bikes by a large institutional looking building. I stopped my bike and said, "I didn't know there was a prison in this town." He looked at me oddly, and said, "Honey, that is the high school." I started to cry. Imagine my horror, when I learned that many of our schools, are designed by architects, who also design prisons.

Is it that we are all forced into a standard system that has absolutely no reverence for who we are as creative individuals, that allows us to accept such conformity, such a lack of originality, and lack of authenticity in our surroundings? Is it that the majority of us are forced to spend year after year learning things that someone else has deemed important, the idea being that we have to be stuffed full of a certain amount of knowledge before we are ready to enter the world, rather than the adults around us holding the space for our own inner exploration and discovery of who we are as unique individuals? That the REALLY important information resides deep within each one of us, and EDUCATION needs to facilitate our own inner journey to bring this information out, to create our own unique dance with the world?

Ariel Miller, M.Div. leads the Bootstrap Education Subgroup. She is currently bootstrapping a home learning program with SelfDesign Global, an organization that has won several awards, and has a 25 year track record, developing new ways of supporting parents, and children in becoming joyful, enthusiastic, lifelong learners.

Sunday, September 14, 2008

Bookmarking Bootstrap

Brewster Kahle used to talk about the Internet as a huge book that everyone was collaboratively writing, and in that spirit, we adopted early on the metaphor of "bookmarking" to note online addresses we might return to for whatever reason. Bookmarking was crucial to evolving browser navigation, and soon enough we had web sites where we could store bookmarks. A site called del.icio.ous gave us a way to categorize bookmarks with simple tags. Any user of the system could create a personal set of tags - roll your own taxonomy. So why not share tags and bookmarks with others? That's the concept of social bookmarking, shared sites, navigation, and bottom-up taxonomies or "folksonomies." Social bookmarking became a popular way to share content, and to "vote" with your feet - using algorithms that rate content by the number of bookmarks and the number of links. This is all part of the evolution of a web-facilitated mediasphere where the line between content producer and content consumer is blurred, and crowds collaborate in making and extending stories and knowledge.

We can facilitate the social bookmarking of our own content by adding "blogware" that makes it easy to bookmark a site at one of the many social bookmarking and collaborative content sites that have appeared. We've done this at bootstrapaustin.org - we've added a drop-down menu to the footer of each post for bookmarking posts at del.icio.us, Digg, Furl, ma.gnolia, Yahoo, Google, Stumbleupon and Facebook.

Social bookmarking can be a powerful way for this community to share knowledge about bootstrapping with each other and the world. We strongly encourage everybody to read the Bootsap Austin blog (http://bootstrapaustin.org) and bookmark those things you find compelling at one or more of the social bookmarking sites listed.

Info about the social bookmarking sites (via Wikipedia):

Delicious (formerly del.icio.us, pronounced "delicious") is a social bookmarking web service for storing, sharing, and discovering web bookmarks.

Digg is a website made for people to discover and share content from anywhere on the Internet, by submitting links and stories, and voting and commenting on submitted links and stories.

Furl (from File Uniform Resource Locators) is a free social bookmarking website that allows members to store searchable copies of webpages and share them with others.

ma.gnolia is a social bookmarking site similar to Delicious.

Yahoo'a Myweb is Yahoo's social bookmarking site.

Google Bookmarks is Google's social bookmarking site.

StumbleUpon is an internet community that allows its users to discover and rate Web pages, photos, and videos. It is a personalized recommendation engine which uses peer and social-networking principles.

At Facebook, you can post bookmarks to you profile.

Note that these sites require registration.

Give the bookmarking widget a try!

Jon leads the Bootstrap Web Subgroup and is involved in two bootstraps, Polycot Associates and Social Web Strategies. He manages his web presence in multiple locations including his Weblogsky blog.

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Thursday, September 11, 2008

Let A Thousand Flowers Bloom

Twelve years ago, I was fresh out of college and found myself at a now-defunct Mac conference in San Jose. The keynote speaker was Guy Kawasaki. As any Mac zealot will tell you, Guy was (and is) almost as much of an icon for Apple as Steve Jobs himself. As I stood at the door to the hall, first in line, reading Guy's latest book, How to Drive your Competition Crazy, I felt a presence next to me. I glanced up from my reading and there was Guy!! I was nearly speechless, but managed to ask for an autograph. He graciously obliged and I was in geek heaven. As I sat there on the front row of Guy's keynote, I took pages of notes. A few distinct pieces of advice have stuck with me all these years and they find their way to the forefront of my mind now and then.

1. Let A Thousand Flowers Bloom
You never know which idea will take hold. Push hard to promote your product, service, or idea into as many areas as possible. Social networking makes this aspect of marketing easier than ever. This is one principle behind why we created BudURL.com. The idea that you need to know which flowers are blooming before it's too late so you can nurse and cultivate these opportunities. Cast your seeds of knowledge far and wide. Encourage others to spread the word and share their experience. You never know which of these seeds will take root and become a major source of opportunity.

2. Focus On Your Customers
Many entrepreneurs will tell you that customer focus is key to success. They are 100% correct. This doesn't mean that the customer is always right. What it does mean is that you need to run your business from both sides of the counter. Put yourself in the customer's shoes. Look at your organization from the outside. What are the 5 criteria that you would use to evaluate a buying decision for a company selling your services? How would you honestly rate your company in each of these areas? How would your customers rate you in each of these areas? If you don't know, pick up the phone (don't email them) and ask them. They want you to know - I promise.

3. Make Mountains out of Molehills
Let's admit it. Not everyone has a mountain to claim their own. Most of us start out with molehills. That's ok, as long as you know how to turn those molehills into mountains. Entrepreneurs around the world will tell you that small is the new big, slow is the new fast, and cheap is chic. They are right, but only if you believe it too. Make your perceived weaknesses your strengths. What edge does your molehill give you? Find it, promote it, and flaunt it. Use it to your advantage and make it work.

4. A Safe First Step
It's human nature to be skeptical and want to "try before you buy." Give your customers a way to engage with you without a massive investment or commitment. Whether it be a limited trial, a money-back guarantee, or a free sample. Whether it's a new product or a slow-mover in inventory, offering the customer a taste of the experience will leave them wanting for more -- assuming they like the taste. If they don't, chances are they weren't going to like the whole package anyway and would have been a bad customer in the end. This gives you both a chance to have a dry-run before making a long-term commitment.

I learned a lot from Guy in that keynote, his books, and from many that he inspired and those who inspired him. A couple of years ago, Guy came to Austin for another speaking engagement. I got another autograph in his latest book, The Art of the Start. I got a kick out of a few pieces of his presentation when I heard much of the same material as I had ten years earlier. Mountains out of molehills, remember?

Andy Meadows is the founder of Live Oak 360, a web software company that focuses on content management, ecommerce, and social networking. Live Oak 360's latest product is BudURL.com. You can learn more about Andy at http://budurl.com/h7su.

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Tuesday, September 09, 2008

Get Moving - Barry Thornton's Advice to Ideators

Talk to customers, get feedback, and shape your product into something customers will pay for. These were some of the words of motivation that Barry Thornton offered in talking to the Bootstrap Austin Ideation Subgroup on July 21, 2008, which can be heard on the BootRap Podcast. Thornton, founder of Clear Cube and current owner of startup Austin Medical Research, offered a number of insights into the bootstrap process, one that he has repeated frequently since launching a concert promotion business in college.

Thornton's philosophy involves starting from wherever you are. He said the startup idea doesn't have to be perfect. All you need is an idea and a passion to get started. By talking to customers, you will mold the idea into a workable form. Then by injecting passion into the idea, others will follow.

"I don't ever think of anything myself," he said. "Ego gets in the way a whole lot...I find the best people to come up with ideas for me are customers, people who will give me money for the idea."

He noted that in his current business, a medical pain relief device seller, he made the first series of sales because the customer's feedback is paramount in discovering the strengths and flaws of the product.

Thornton noted that too many people become entranced with their idea trying to perfect it over time without getting customer feedback. "You can fall in love with something and wind up destroying yourself in the process," he said.

Thornton emphasized repeatedly that entrepreneurs who don't talk to customers will fail. He discussed a recent business model review for a university group which he cut short. The group was trying to present a case for a business and secure $500K in investment for a business model that had never been floated to any customer. Having learned of this omission, Thornton said he told them, "'this session is over.' If you've never taken the idea in front of a customer, then it's science fiction."

Thornton has used the bootstrap method to start several businesses with about five succeeding and ten failing, by his account. Clearcube was among his successes. His experience in entrepreneurship began with a college club at Berkeley that the university provided with funds to promote the club. Thornton and his colleagues used the opportunity to land several concerts, including one Jimi Hendrix. After three shows, the money poured in, but the Berkeley dean was not amused. The dean called the club members in and told them they had to forfeit the money or face an indirect form of suspension. Thornton decided to split, creating another business in mobile sound.

Founders have a special role

He said that entrepreneurs should recognize the uniqueness in being founders. They have taken the great leap of creating something from nothing, and that step garners respect from all others in business, including CEOs. They can try whatever means to justify their position, but they will always be secondary to the founder.

"They (CEOs) will come to you because they don't have what you have- a glow inside," he said. "You changed life. They didn't, and that difference is profound. If you don't remember it, you'll put too much hope in them and expect too much to them. They will try to modify it for something they think it's better." He encouraged the group to embrace their roles as founders to call on business leaders, saying that the title of founder alone will enable the opportunity.

Use Patents Wisely

Thornton offered some surprising feedback when asked about patents, also echoed in his previous blog post. Because he's the owner of 45 patents and a specialist in patent "workarounds," one might expect him to recommend the patent process for new entrepreneurs. Not exactly. Instead, he noted that patents on their own hold no value. Patents solely represent knowledge.

He said, "I know Francis Bacon said 'knowledge is power.' "No, knowledge alone is not power, knowledge plus action is power." Quoting Thomas Palmer, he said, "'Mere knowledge is not power; it is only possibility. Action is power; and its highest manifestation is when it is directed by knowledge.'"

When asked about how an entrepreneur should use patents, he gave some candid advice: Don't wait for the utility patent. Instead, all the value lies in the provisional patent, in which the claims are filed and sealed for one year. It allows the entrepreneur a moderate means of protection without the need to disclose precise terms. Without having to disclose the precise patent claims, an entrepreneur can promote the business model without the specific claims and provide competitors with a foundation to find loop holes. If the entrepreneur decides later to file for an actual patent, then he/she has the opportunity to rewrite the claims with knowledge gained from the point of filing the provisional.

Thornton said that his work involves finding ways to discover opportunities to operate within an environment heavily covered by patents. Based on his experience, he can interpret the true meaning of a patent and direct his clients to work in adjacent areas not covered by the patent.

Watch Out for VCs

Finally, Thornton had some special feedback about working with venture capitalists: beware.

"their (VCs') need for success is as not as great as their need for more investors," said Thornton.

He said that they are in their third generation of VC managers, a group of MBAs without experience in running businesses. He said that through the use of preferred stock, they have incentives that are completely misaligned with doing what's right for the customer. In a recent experience of his, he discovered the VCs had worked behind the scenes to cash out of the company in a way that would have destroyed the value of the company.

Thornton closed by reiterating what he said at the beginning - you as an entrepreneur have to move to be successful.

"My only last thing to say is to execute - do: an entrepreneur sitting on his ass is an "'entremanure.'"


Sunday, September 07, 2008

Lifestyle or Business? Why not Both?

I'll admit it. I like to enjoy the finer things in life. Gourmet food and superb wines. Luxurious and stylish clothing and furniture. Art. Gadgets. You name it. But more than that, I have always enjoyed sharing those things with others and sharing the stories about how I found and chose the possessions and experiences I have, and how I've used those things to create the environment in which I live - the environment that reflects who I am and what I value. This has been nothing more than a lifestyle choice for many years, but I've known for a long time that a lot of people are intrigued by how I discovered and chose the often obscure but usually exceptional things that inhabit my life. Now I see that I might make a nice little business as a "lifestyle consultant" doing the things I enjoy and do daily as a matter of habit.

The decision to create this business, Living! by Allen, wasn't entirely my own. After all, I was just a Maven/Relater going about my business and living life on my own terms. It was two close friends, Bijoy Goswami, an Evangelist/Maven, and Marcy Hoen, another Maven/Relater, who recognized that my approach to consciously crafting my lifestyle was quite unique in their experience and urged me to turn my knowledge and discernment into a business. I was already living my future business and bringing people together within the Bootstrap Art Subgroup I lead and through other efforts in the community and in my personal life. Living! by Allen is simply a way of taking those skills, interests, and relationships public. For those who are unfamiliar with the terms, they come from Bijoy's book, The Human Fabric. A Maven is a "subject matter expert" who delights in knowledge and analyzing or creating things. A Relater builds relationships and community. An Evangelist is a champion for the ideas or products he/she strongly believes in. My internal Maven/Relater duality creates a "power of two" which is necessary for the success of most ventures. Likewise, combining a maven energy with an evangelist energy creates a "power of two" that really gives a venture legs and hope.

For this bootstrap (ad)venture, I will be taking advantage of the "power of two," "demo, sell, build," "right action right time," and especially the "use everything" concepts that can make or break a business that's moving from the Ideation phase to the Valley of Death. I'll keep you posted on how it goes. In the mean time, if you are in Ideation and thinking about starting your own business, try incorporating different aspects of your life and weaving them together. And for more information on the Bootstrap concepts and terminology mentioned above, visit the Bootstrap Map.

Allen Beuershausen started and leads the Bootstrap Art Subgroup at Bootstrap Austin. He will be chronicling his adventures on the Living by Allen blog.

Wednesday, September 03, 2008

Dan Ariely Shows Us How We're Predictably Irrational

We think we make logical decisions when purchasing products, choosing a mate or deciding whether or not to cheat. Dan Ariely has some experiments that will make you question just how rational you are.

Dan Ariely is the author of the playfully eye-opening book Predictably Irrational: The Hidden Forces that Shape our Decisions. This month, Dan spoke with the Marketing Subgroup of the Bootstrap Network. Brian Massey of Conversion Sciences led the discussion and the entire interview is available at via the Boot Rap Podcast.

Ariely makes no bones about turning long-held beliefs on their head. For example, the Law of Supply and Demand, is a principle as important to economics as Newtonian physics. But, it turns out that we are heavily influenced by "anchors," or prices that arbitrarily influence how much we would pay for an item. Ariely tells us about an experiment he conducts in which the last two numbers of the test subjects' Social Security Number -- a truly arbitrary number -- establish the value of items when bidding in an auction.

Brian questions Dan about the value of "free" in influencing behavior. Dan demonstrates that "free" is the Kryptonite that cripples our decision-making no matter how rational we think we are. It turns out that the difference between $.01 and $.02 is small, but the difference between $.01 and free is huge to us.

This discussion of "free" leads us to talk about the "freemium" models that many Web 2.0 entrepreneurs are using to grow their online audience. Ariely recommends discounted trials instead of these free + premium service levels. Once free is introduced, he argues, that's its perceived value.

Ariely discusses his experiments on how we value what we own over what we don't, demonstrates that our level of satisfaction with a purchase is directly tied to our expectations, and uncovers how an expensive brand of aspirin will make us feel better than the same aspirin at a lower price.

There are no sacred cows in Ariely's presentation. He takes on our tendency to cheat when money is involved and the way we our decisions change when we're sexually aroused.

If your curiosity is aroused, expect to be satisfied by the audio of this interview, especially since the price is right: free.

Listen to A Predictably Irrational Conversation with Dan Ariely.

Subscribe to the Boot Rap RSS feed.

Visit Dan Ariely's Blog and Sign Up to participate in his ongoing experiments at http://www.predictablyirrational.com.

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